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With Statistics Canada’s latest release of its Survey of Earnings, Payroll, and Hours (SEPH), it gives us another opportunity to evaluate the labour market in Canada. And while the SEPH data lag that of the Labour Force Survey (LFS)—this release only covers May whereas we’ve already seen LFS data for June—we get some additional metrics that offer insights into the labour market we can’t get elsewhere.

Those data include average weekly earnings, which can be a little less volatile than the wage data from LFS (that showed average hourly wages up 5.4% in June compared to the prior year). And in May, average weekly earnings in Canada were up 4.1% year-over-year—still robust wage growth. That’s good news for workers, but less so for the Bank of Canada as it tries to finish taming inflation. 

One of the main drivers of high wage growth over the past three years (besides inflation itself) has been a tight labour market where employers have had to increase compensation in order to attract workers. The number of job openings soared in the aftermath of the pandemic peaking in Canada and British Columbia at the end of 2021 with job vacancy rates of 5.7% and 7.2% respectively. These elevated vacancy rates put upward pressure on wages as employers competed for talent. And while job vacancies have been steadily declining for more than two years, they had remained elevated relative to their pre-pandemic levels until recently.

The job vacancy rates nationally and here in BC have reached their lowest levels since the beginning of the pandemic. In fact, at 3.8% the rate in BC is now at its lowest point since August 2017 as the mismatch between people and jobs has largely been resolved. This should temper future wage growth to a degree, and is yet another indication that the fight against high inflation is almost over.